Condo Media - October 2020 - 16

HOW TO AVOID BUILDING ENVELOPE SURPRISES
SURPRISE! YOUR MAINTENANCE
ROUTINE DOESN'T WORK
ANYMORE.
During the early years of a building envelope's life cycle, when your siding is
young and failure rates are low, regular
maintenance painting and spot siding
repairs make sense.
But over time, water and wind find
ways to penetrate the building envelope. Paint starts to fail on siding and
trim. The interval between painting
cycles gets shorter. At the same time,
the amount of siding and trim replaced
with each painting cycle keeps growing, along with the cost.
Meanwhile, many associations
continue to rubber stamp the same
maintenance routines they've followed
for years. That's a problem.
Caring for an aging building envelope with a maintenance plan designed
for a 5-year-old property makes as
little sense as a 55-year-old seeing a
pediatrician for a physical. Like people,
aging condominium properties have
different ailments than they did earlier
in their lifecycles - and they require
different care.
Every building envelope has a finite
lifespan. Exterior components on condominium properties built after 1980
typically have a lifespan of less than 30
years. When a mid- to late-life building
envelope shows signs of chronic conditions like peeling paint, failing siding
and trim, and rotting wood around
windows, it's time to rethink your approach to maintenance.
Ignore these warning signs at your
homeowners' peril. Leaving an aggressive spot repair policy on autopilot will
only prove frustrating and expensive.
The reason is that spot repairs do not
correct the underlying cause of these
problems; they are a short-term fix -
not a lasting solution.
Spot repairs make less sense as your
building envelope gets closer to endof-life. Still, many associations continue to approve routine spot repairs
years past the point of any reasonable
financial return. But the math is inescapable. So is the surprise waiting for

CONDOMEDIA October 2020

homeowners when they realize how
much they've spent trying to delay
the inevitable.
SURPRISE! YOUR RESERVE
STUDY ISN'T AS REALISTIC
AS YOU THINK.
A reserve study forecasts how much
money an association will need, and
when they will need it, to pay for future
capital expenses. That's a good idea.
In our experience, however, the typical
reserve study is an incomplete planning tool for your building envelope.
SPS has been serving condominium
communities for more than 30 years.
In all that time, we've yet to find an
association whose reserves were fully
funded to pay for a major building
envelope project when that project was
deemed necessary. Many associations
manage to save some cash towards the
expense, but they never have enough.
Even when associations plan to pay
for a project using reserve funds and
financing, the reality is that reserve
funding is likely to fall short - and the
amount can be significant.
For example, take the experience of
a client whose reserve study called for
an $800,000 roofing project in three
years. The community set up a plan to
save that money. Trustees told homeowners they had a plan to replace the
roofs using reserves.
But when they put the roofing
project out for bid, the lowest competitive price wasn't $800,000. It was
$1.7 million. Who is responsible for
the additional $900,000? Homeowners. And it gets worse...
During the roofing project, the client
uncovered substantial siding problems.
Now, the community is also planning a
multi-million-dollar project to replace
siding, trim, and decks. Ever met a
trustee or homeowner happy to have
that conversation? I haven't.
Why is there such a gap between the
building envelope section of a reserve
study and reality? One well-known
factor is that associations do not follow
their reserve studies. But there are
deeper reasons for the disconnect.

Reserve studies detail
the remaining useful life
and replacement costs
for individual building
envelope components.
A building envelope
is not just an itemized
collection of parts; it is
an integrated system of
building components -
roofing, siding, windows,
doors, and decks - that
are tied together using weatherproofing
underlayments and
flashing details. And the
construction realties of
replacing these interconnected components have
changed. For example,
30 years ago, no one
anticipated that replacing a roof was going to be
more complicated than
ripping off old shingles
and installing new ones.
Another problem is
that the market has
not properly valued
the time required to
produce reserve studies
for mature properties.
As condominiums age, the complexity
of a reserve study increases. So does
the value of a reserve study that provides meaningful analysis. Historically,
associations have not been willing to
make that investment.
The result? Your reserve study
contains useful information. It is
not a proxy for being prepared with
a comprehensive, realistic plan for
your building envelope.
GET THE FACTS
Building envelope surprises can
happen to even the most careful associations. How can you protect your
community from being blindsided?
The easiest way is to take a facts-first
approach to planning, starting with
the physical condition of your building
envelope and your community's financial circumstances.

Condo Media - October 2020

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